Pandemic shutters Medusa's mine

A PROVINCIAL stay-at-home order to help restrict the spread of the deadly COVID-19 pandemic has forced Medusa Mining to place its Co-O gold mine on care and maintenance and, unless the miner secures an exemption, it warns could take a hit to its full financial year guidance.
Pandemic shutters Medusa's mine Pandemic shutters Medusa's mine Pandemic shutters Medusa's mine Pandemic shutters Medusa's mine Pandemic shutters Medusa's mine

Medusa's mining has been suspended

Haydn Black

Reporter

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The Agusan Del Sur governor issued an executive order late last week requiring people in the province to stay at home, other than those working in essential or exempt industries.
 
Mining is not considered an essential industry, but Medusa has secured approvals to maintain a skeleton staff at the mine to ensure it can rapidly resume if the enhanced community quarantine order is lifted, or if an exemption is granted.
 
Medusa has applied for permission to operate Co-O at a reduced capacity, with the mine and mill to operate using only local workers "so as not to totally hamper the economic interests of the people and the different sectors dependent on the company".
 
It expects an answer in the immediate future.
 
"There has been no known case among employees, or in the workplace, or in the municipalities where they belong," Medusa said.
 
The Philippines has a total of 4648 reported cases COVID-19, with 297 deaths recorded.
 
However, if the order is still in place next week, Medusa warned it may fall short of guidance of 95,000-105,000 ounces at an all-in sustaining cost between US$1025-$1125/oz.     
 
It has previously maintained its guidance despite several setbacks, such as the death of two workers at the mine and the failure of the electronic controller for L8 shaft winder.
 
The company said it was in a strong position with cash equivalent funds of $32.5 million and a short-term loan facility of $5.7 million.
 
Medusa plans to spend up to $59 million over the next three years to install a decline and associated infrastructure to access ore below level 12, opening the deeper potential of the vein systems, overcoming limitations with the existing hoist system. 
 
Co-O has operated for more than a decade and has reserves of 332,000oz after depletion of 111,000oz, while resources are 1.27Moz.
 
It had hoped to add more ounces, but faced drilling access restrictions within the mine.
 
The company is optimistic of making up lost ground, claiming there is improved continuity of previously interpreted narrow veins, something that should help reduce dilution. 
 
The company has been reviewing the nearby 435,000oz Bananghilig deposit, in an area with artisanal workings, however COVID-19 has impacted that work, and the work is now expected to be completed in September.
 
Medusa shares eased 4% on Thursday to A45.5c, above its 52-week low of 35.5c from last April.